Home Cover Story What’s your ROI?

What’s your ROI?

August 2010

Published in the August 2010 issue of Today’s Hospitalist

During his six-plus years as CEO of Sand Lake Hospitalists, Jauvid Ayadi, MD, has seen the performance priorities that the hospital sets for his group change from year to year.

Initially, administrators at the Dr. P. Phillips Hospital in Orlando, Fla., where his private group works, expected the hospitalists to prove their salt through better cost utilization and DRG coding. The physicians were then asked to improve compliance with core measures, increase the number of early discharges and launch the hospital’s computer physician-order entry system. More recently, the emphasis shifted again, this time to physician performance on a “patients-first” policy that stresses patient interaction and satisfaction.

“While we’re still expected to meet the earlier metrics”, Dr. Ayadi says, “these new performance measures require us to tap an entirely different skill set, so they pose new challenges.”

Like Dr. Ayadi’s group, hospitalist programs around the country are discovering that administrators still want great performance on the bread-and-butter metrics that the specialty is justly famous for: shorter lengths of stay, solid performance on core measures and maximizing available bed days. But hospital leaders are now demanding that hospitalists find ways to produce even greater value.

For some groups, the new value equation can mean higher patient satisfaction scores, fewer denied claims or keeping hospitals out of regulatory trouble. But for just about every group, adding value now translates into a much more amorphous goal: exerting leadership, not just on committees or within individual hospitalist groups, but on hospital-wide initiatives.

Here’s a look at how several hospitalist groups across the country are meeting the challenge of proving return on investment.

“Non-contractual obligations”
While hospitalist leaders say that hospital CEOs are using leadership as the primary yardstick to measure the value of a hospitalist program, they aren’t looking for touchy-feely examples of how hospitalists are rallying the troops. Hospital executives want leadership, but they also want concrete results.

“Optimizing performance on core measures is an expectation,” says Anna-Gene O’Neal, vice president for quality and performance improvement for Cogent Healthcare, a national hospitalist management company based in Brentwood, Tenn. “Partnership makes the most difference now.”

While Cogent teams track new metrics, including preventable complications such as falls, bedsores and catheter infections, hospitals now have a host of what Ms. O’Neal calls “non-contractual expectations.”

“Hospitalists are expected to lead ‘relationship management’ among specialists, primary care physicians and administrators,” she points out. “They also should be represented on all the big operating committees, and troubleshoot problems that arise in areas like case management.”

Hospitalist groups are also being asked to take responsibility for initiatives that are “house-wide, not just specific to their group.” A Cogent team at one hospital, for instance, is piloting a new CPOE system.

What are the repercussions for not meeting those expectations? Ms. O’Neal says the answer is simple: “Turnover of individual people in a program, or a whole program.”

How to measure success?
In Orlando, Dr. Ayadi says that the challenge in embracing new initiatives is figuring out how to measure success.

Data on DRG coding can be easily pulled from billing, he says, but data on measures like patient satisfaction are collected primarily from patient surveys. That can lead to results that are less predictable “and less manageable ” for his group.

To improve patient satisfaction scores, the 11-physician group, which treats most patients at the 235-bed Dr. P. Phillips Hospital, has changed the way physicians introduce themselves to new patients and the amount of time they spend at the bedside. That extra effort, Dr. Ayadi says, has helped improve scores.

But the next phase of bumping up patient satisfaction is even more ambitious: geographic rounding. While one goal of moving to geographic rounding is to “show patients we’re working as a team,” Dr. Ayadi says, “the challenge is how to staff this new initiative in a way that does not cause us to operate at a loss.”

With previous metrics, Dr. Ayadi says, the hospital typically established a bonus pool with thresholds the group had to surpass to receive the funds. But geographic rounding would usher in a different financial relationship with the hospital.

To make geographic rounding work, Dr. Ayadi says, the hospital will have to help finance the group’s ability to hire more physicians and provide additional ancillary staff. If discussions between the group and the hospital succeed, Dr. Ayadi expects that the hospital will fund a pilot of geographic rounding in one unit, set metrics it would like the hospitalists to hit, and then assess whether “the level of support it provides us results in improved scores,” he says.

“If the hospital sees value, it will expand the initiative to the rest of the hospital.”

How to extract more value
According to Femi Adewunmi, MD, MBA, the days when hospitalists had to make their business case to administrators are over. But he points out that his life as the head of a hospitalist group hasn’t gotten any easier.

“The questions about how do we demonstrate value have been answered,” says Dr. Adewunmi, who four years ago started the hospitalist program at Johnston Medical Center, a 199-bed community hospital in Smithfield, N.C. “The question now is how much more value can hospitals extract from a program.”

When Dr. Adewunmi started the group, his mandate from administrators was to take on runaway length-of-stay figures and core measure indicators.

But to continue to prove his group’s value to the hospital, Dr. Adewunmi has worked to increase referrals to the hospital, spearheading a marketing campaign in which he met with primary care physicians and distributed a brochure about the hospitalist program to their offices.

Dr. Adewunmi was also ahead of the curve at his hospital in pushing the transition to a paperless electronic medical record (EMR), advocating for voice recognition software for dictating all the hospitalists’ notes. “We’ve been asking about it for a while, but the hospital wasn’t ready until this year,” he points out. He led a pilot program with the dictation system, working with the hospital’s information technology department to design the dictation templates. The hospitalists helped get the initiative off the ground.

Their efforts have cut transcription costs and the wait time for notes, and improved communication among providers; they may also help the hospital qualify for some EMR incentives. While the initiatives have taken time, Dr. Adewunmi says that the payoff will come in “leverage.”

With hospitalist volumes up and the group coming close to breaking even on what it bills, he hopes the goodwill will be there when it comes time to negotiate raises or increase staffing.

Attention to case mix index
At Regions Hospital in St. Paul, Minn., a level 1 trauma center, Rick Hilger, MD, medical director for care management, says that the hospitalist group has been charged with improving performance (and revenue) on two new metrics.

One is case mix index. A review of 2009 charts revealed that the hospital would have lost $3 million if the hospitalists had not been willing to work with coders to provide appropriate documentation. A team of five coding specialists continue to review the charts of Medicare patients, and hospitalists are encouraged to work closely with those specialists.

“We have really stressed to the docs here at Regions that they don’t have to agree with the coders, but we want them to respond,” Dr. Hilger says. The hospitalists, he adds, have improved their response rate to coders’ questions from 70% to 90%.

And last year, the hospitalists set a goal of entering 35% of their daily discharge orders by 9 a.m. to free up needed beds. To execute the plan, doctors began identifying patients likely to be discharged and working on those orders the night before or first thing in the morning.

The group also switched to a more uniform rounding system where doctors see the sickest patients first, followed by patients who can likely be discharged that day, and ending with patients who are stable but not going anywhere.

“When we started a year ago, we got orders in before 9 a.m. about 10% of the time,” Dr. Hilger says. “Twelve months later, we’re averaging between 20% and 25%.”

Avoiding RAC trouble
Dr. Hilger adds that the hospitalists have also taken on another initiative designed to protect the hospital’s bottom line. They are helping the hospital meet new heightened financial scrutiny imposed by Medicare’s recovery audit contractor (RAC) program.

Last September, the hospitalists instituted a new system in which admission orders are not placed until the hospital medicine team has seen the patient. Under the old system, Dr. Hilger says, ED residents would put these orders in with little ongoing education about the difference between admission and observation.

To help educate hospitalists, the group set up noon conferences and journal clubs to make sure physicians recognize Medicare’s criteria for admissions. Coding specialists continue to work with the residents who rotate every month, while a computerized system embeds reminders with admission criteria.

“What we’ve seen over the last six months is a higher number of patients placed on observation,” Dr. Hilger says. “In the short run, it’s less revenue for the hospital, but we want to decrease the risk of RAC exposure over the long term.”

Leadership beyond the hospital
At Centinela Freeman Health System in Inglewood, Calif., the hospitalists were given a very specific mission to prove their value: reduce the number of denials from a major payer.

Alex Shen, MD, the program’s medical director, says that the group treated a high volume of Medi-Cal patients in 2007. In 2006, however, the year before he and his group began working at the hospital, Medi-Cal denials added up to a whopping 2,400 days, costing the hospital nearly $3 million that year alone.

“It can take a year or more to get that money back on appeal,” says Dr. Shen. The hospital was so intent on having the hospitalists reduce Medi-Cal denials that a portion of the group’s income was tied specifically to those reductions.

Dr. Shen worked with group members to improve their documentation, training the hospitalists to avoid “definite red flags,” such as not describing patient conditions that required continued hospitalization. But another part of the solution was establishing a good working relationship with state claims reviewers.

“Reviewers were not easily accessible,” Dr. Shen says. “We started by bringing one or two specific cases to them and said, ‘We’d like to understand how to do this better.’ ” The results from building those relationships “and improving documentation “were dramatic: In 2007, Medi- Cal denied only 560 days.

“Administrators were elated,” Dr. Shen recalls, “and those improvements meant bonuses.” While Dr. Shen’s group decided to go work in another hospital, its success in reducing Medi-Cal denials gave the group “leverage to expand the program, and we were negotiating when I left.”

Managing expectations
The experience also taught Dr. Shen a valuable lesson about how to set up and manage expectations linked to evaluations, bonuses and ROI calculations. At Centinela, he says, the group was offered a performance bonus based on decreasing the Medi-Cal denial rate by a somewhat arbitrary goal of 30%.

The hospitalists later discovered, however, that the hospital’s databases couldn’t accurately track a denial rate. “We found that a more accurate, trackable measure of success was looking at the absolute number of days denied per year compared to previous years,” he says. That new metric also made it possible to calculate the additional revenue the hospital was receiving as a result of the hospitalists’ efforts.

“It’s dangerous to have bonus calculations that are rigid because, depending on the data and the people running the data, you could lock yourself into a flawed metric,” Dr. Shen says. “In my current situation, when we talk about return on investment, we try not to peg ourselves to absolute numbers.”

Dr. Shen, who is now medical director at Torrance Memorial Medical Center in Torrance, Calif., says that another lesson learned is to make sure that performance metrics can be easily measured. That’s a tall order when hospitalists are striking out into clinical processes or quality improvement areas that are new to them.

New hospitalist groups, he says, should start with well established metrics for which there are good national or local data. And with any new improvement project, “use the first year to gather data,” Dr. Shen advises, “and then develop meaningful improvement targets.”

He notes that while some long-established metrics may drop down on the priority list, they “don’t ever disappear.” His take on managing the growing number of ways in which hospitalists are expected to perform is to view them as necessary improvements hospital-wide.

“Performance improvement cannot be a short-term project and should not be isolated to the hospitalist physicians,” Dr. Shen says. “Whatever we do, we strive to make changes to the entire hospital system so that improvements are sustainable and allow non-hospitalists to improve performance too.”

Tracey Regan is a freelance health care writer based in Hoboken, N.J.

Improving patient satisfaction: How much is good enough?

AS CEO OF SAND LAKE HOSPITALISTS, a private hospitalist group in Orlando, Fla., that works exclusively for one hospital, Jauvid Ayadi, MD, says both he and hospital administrators are currently at a loss to figure out a good metric for measuring hospitalist-led improvements on patient satisfaction scores.

The administration has launched a “patients-first” initiative to improve patient satisfaction scores. But according to Dr. Ayadi, “there is no national standard” for how well hospitalists do on those scores, making it hard to measure success.

Certainly, he points out, hospitalists can’t be compared to primary care physicians, as least as far as satisfaction score benchmarks. “Outpatient physicians know their patients,” he says.

Then there are several other factors that put “hospitalists as a group at a disadvantage.” They often deal with a transient population, they treat “the sickest of the sick,” they deal with people who want pain drugs or are unhappy that they’re not getting pain drugs, and “we don’t have relationships with families or patients, so these are new relationships.”

Then there’s the fact that Dr. Ayadi’s hospital “which he says is smack in the middle of Disney World, Universal Studios and SeaWorld “treats a high volume of tourists.

“If you look at patient satisfaction scores, the lowest performing states are Florida, Hawaii and Nevada, and these are all tourist states,” he says. “But hospitalists as a group are at a disadvantage, and not just in the Florida market. We don’t have a national voice or the ability to compare hospitalists to other hospitalists in different parts of the country.”